Fall 2009
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4 Image-Based Wholesale Lockbox:
A Powerful Transitional Solution
Today’s state-of-the-art image-based lockbox should not be viewed as a paper collection
product. It’s really a transitional product that assists companies in moving from paper to
electronic payment processing.
4
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4 Achieve Greater Cost Savings on A/P Payments
While Increasing Card Rebate Potential
Organizations using a U.S. Bank One Card program can now further automate purchasing and
expense management and earn rebates on additional transactions by implementing U.S. Bank
Access® Online Payment Plus.
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4 Evaluate New ACH Opportunities
to Manage Risk, Stay Innovative
In tough economic times, winning organizations strive to stay innovative while continuing to
focus on effective risk management, and the Automated Clearing House (ACH) payment
network can support that effort in corporate treasury departments, says Janet Estep, president
and CEO of NACHA – The Electronic Payments Association.
4
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4 The Power of Green
Skip the Yellow and White, Opt for Green
Over 500 million phone book directories are printed every year, uilizing billions of pounds of
paper, wasting enormous energy resources and ultimately filling valuable landfill space Find
out how you can minimize the environmental impact.
® 2009 U.S. Bancorp
Fall 2009
Image-Based Wholesale Lockbox:
A Powerful Transitional Solution
As the migration from paper to electronic payments
continues to build momentum in this country, a
bank product you may not be hearing much about
is wholesale lockbox. After all, lockbox, the longtime
check collection and deposit service, is a paper
product, right? And why, in this era of burgeoning
e-payments, would anyone be focusing on a
paper product?
The reason is simple: Paper checks continue to
dominate business-to-business (B2B) payment
volume in the United States, and so wholesale
lockbox is still a very important tool at many
companies for enhancing cash flow and
operating efficiency.
Moreover, today’s state-of-the-art image-based
lockbox should not be viewed as a paper collection
product, says Les Young, a Senior Product Manager
at U.S. Bank. “It’s really a transitional product that
assists companies in moving from paper to
electronic payment processing.”
Moving toward electronic processing
An image-based lockbox truncates the paper —
the checks and the associated remittance
documents — by capturing their images at the
bank’s lockbox operation. From that point forward,
customer processing of those remittances
becomes electronic.
The lockbox bank captures receivables data from
the images, transmits that data and the images to its
® 2009 U.S. Bancorp
customer, and the customer applies the data to its
accounts receivable system and uses the images to
resolve exceptions.
“Instead of receiving a paper lockbox remittance
package on a Wednesday morning, for instance, the
company can access the receivables the previous
Tuesday afternoon and begin resolving exceptions,”
Young explains.
In addition to transmitting lockbox check and
document images to customers, banks can make
such images available for online viewing and provide
them on CDs or DVDs for long-term storage.
Image capabilities can reduce the time it takes to
process lockbox receipts and to access remittance
information, allowing companies to apply cash faster
and leverage online research capabilities to improve
customer service.
U.S. Bank continues to invest in lockbox
Some banks are so intent on preparing for the future
of electronic payments that they have stopped
investing in their lockbox platforms. But that’s
not the case at U.S. Bank.
In fact, U.S. Bank is preparing for the rollout of
a major wholesale lockbox platform upgrade.
In a process that will begin in the summer of 2010
and extend into 2012, the bank plans to install a new
lockbox platform in nine of its 15 wholesale lockbox
locations. Each of these nine national lockbox
locations, stretching from the West Coast to Ohio,
will feature the latest in image-based lockbox
features and capabilities.
Consistent, multi-site processing
One of the big advantages of the lockbox platform
upgrade is that it will enable companies to use
multiple national sites to collect lockbox receipts and
deposit them in one consolidated account on a daily
basis. This feature, known as “multi-site processing,”
allows companies to use the collection sites closest to
their remitters to speed receipts. But no matter which
sites they use, all receipts can be deposited into the
same account, and customers can review all check
and related remittance images online in one place.
“The bank’s processing procedures and the lockbox
service experience for customers will be consistent
across all of the national sites,” Young says.
® 2009 U.S. Bancorp
Color imaging — and other new capabilities
Some of the capabilities wholesale lockbox
customers can experience when using U.S. Bank’s
national processing sites will include:
4 Color imaging. Providing check and document
images in color improves readability, particularly
if remitters have highlighted documents or
submitted documents on thin or low-quality
paper. Color imaging will be optional.
4 Image transmission. This capability benefits
customers who wish to archive images of
checks and documents on their platform and
have them accessible to staff over a large
geographical footprint.
4 Scannable lockbox. Users will be able to accept
in one lockbox both wholesale remittances and
retail-type remittances accompanied by
scannable coupons.
4 Online decisioning. Instead of returning exception
items to customers by mail, U.S. Bank will provide
check and document images for the customer to
review online for a reject-or-process decision.
4 Deposit splitting. Users can have one lockbox but
give the bank directions on how to split individual
deposits into separate accounts.
4 Accounts receivable matching. Customers can
provide U.S. Bank with their outstanding receivables
file and have the bank map incoming remittances
against that file to automate reconciliation.
Continued leadership in cash management
In the next few years, U.S. Bank will be installing the
upgraded image-based wholesale lockbox platform
and offering a consistent processing experience at
the following locations: Chicago, Los Angeles, St.
Louis, St. Paul, Cincinnati, Milwaukee, Denver,
Portland and Seattle. To learn more, contact your
Treasury Management Consultant.
® 2009 U.S. Bancorp
Fall 2009
Achieve Greater Cost Savings on A/P Payments
While Increasing Card Rebate Potential
Organizations using a U.S. Bank One Card program
can now further automate purchasing and expense
management and earn rebates on additional
transactions by implementing U.S. Bank Access®
Online Payment Plus.
Today, more than ever, organizations are searching
for easy-to-use tools that support cost reduction by
promoting processing efficiencies. Payment Plus, an
online payment alternative that complements a One
Card program, can help achieve these objectives
while improving overall payment visibility and
control. Payment Plus allows organizations to:
4 Reduce costs and fraud associated with other
payment types
4 Automate payment and reconciliation processes
4 Enhance cash management
Win-win solution
Payment Plus provides a win-win solution for both
buyers and suppliers. Buyers will experience
improved payment visibility and control by leveraging
the dynamic credit adjustments and single-use
accounts found in Payment Plus. Supplier payments
are processed only when approved and only for the
amount authorized, allowing organizations flexible
cash management.
Suppliers are able to decrease their processing
costs by receiving electronic payments that minimize
manual effort. In addition, suppliers are guaranteed
payment through this secure system.
® 2009 U.S. Bancorp
As easy as online bill payment
“To use Payment Plus, you go through your
company’s normal requisition, approval and invoice
processes,” explains Stephen Withrow, Vice
President and Manager, U.S. Corporate Payment
Services. “Only the payment method changes.”
The process of making an accounts payable (A/P)
payment becomes a lot like making a consumer
online bill payment. “You log into your financial
application, select the invoices you want to pay and
then choose how you want to pay them — in this
case you select the Payment Plus option,”
Withrow says.
You deliver the payment instruction to U.S. Bank
through our Access Online Web-based card program
management system, either by submitting an
automated file or completing a simple online form.
“Instead of sending an electronic file to a check
printer that produces and mails an accounts
payable check, you send your payment instructions
“These days, companies are looking for cash
anyplace they can find it,” Withrow says. “If you
have $200,000 or $300,000 in A/P spend each
month, why not earn 120 or 130 basis points on
that spend through rebates?”
card account,” Withrow says.
Access Online Payment Plus enables you to
automate your accounts payable spend much more
than you can with a One Card program alone. To
learn more about this free service from U.S. Bank,
talk to your Relationship Manager or Treasury
Management Consultant.
to U.S. Bank and we initiate payment against your
Buyers can monitor their payments with Access
Online’s automated reporting features. Transactions
can be posted to client financial systems through
Access Online file extracts.
Controls, automation, cash back and more
With Payment Plus, you maintain a high level of
control over payments while achieving the additional
cost savings, efficiencies and rebates of a
commercial card program.
The online payment process eliminates the costs
associated with issuing and mailing checks, including
buying check stock and postage. It also reduces staff
labor by automatically reconciling payments.
Furthermore, Payment Plus helps address the
financial stresses that all companies are under in
this economic downturn, Withrow says. “Treasury
departments are feeling the pressure to get more
work done with fewer people,” he says. “Payment
Plus allows you to automate your payables and cut
costs without any re-engineering effort. It’s a way to
enhance productivity and cash management.
Suppliers are paid promptly while buyers gain an
additional 15-30 days float because payments to
U.S. Bank are based on cycle date.
® 2009 U.S. Bancorp
Fall 2009
Evaluate New ACH Opportunities
to Manage Risk, Stay Innovative
In tough economic times, winning organizations
strive to stay innovative while continuing to focus on
effective risk management, and the Automated
Clearing House (ACH) payment network can support
that effort in corporate treasury departments, says
Janet Estep, president and CEO of NACHA – The
Electronic Payments Association.
ACH transaction volume continues to grow because
the network offers the efficiency and cost reduction
that organizations need today more than ever, while
subjecting them to relatively low risk, Estep says.
Sources of growth
Much of the ACH volume growth in the last five
years has been due to the emergence of various
check conversion applications. Back-office check
conversion (BOC), the most recently launched of
such applications, has seen growth exceeding 400%
in the first half of 2009, Estep says. However, there
has also been significant growth in “native” electronic
transactions — ones that don’t start out as a paper
check — such as ACH WEB coded payments, which
grew 20% in 2008 and at a rate of 12% in the first
half of 2009, she notes. (“WEB” is the NACHA
standard entry class code for ACH debit transactions
authorized by payers using the Internet.)
“Consumers are more comfortable making Internet
bill payments than they have ever been,” Estep
says, “and that represents an opportunity for the
businesses that serve them.”
® 2009 U.S. Bancorp
In 2008, Internet-initiated ACH payments reached
nearly $1 trillion, Estep reports, and the overall
number of ACH payments rose by 1 billion.
Study, statistics highlight low risk
One reason for its popularity is that the ACH
payment network continues to offer low levels of risk
compared to other payment types. Estep cites the
Association for Financial Professionals (AFP) 2009
Fraud Study, in which 60% of respondents pointed
to paper checks as the payment method most
responsible for losses, compared to 20% who cited
consumer cards and 10% corporate cards.
Meanwhile, ACH debits and credits drew only 5%
and 3% responses, respectively.
ACH debits can, under certain circumstances, be
returned as unauthorized if they are fraudulent or for
the wrong amount, among other reasons.
Unauthorized ACH debit return rates, a key measure
of ACH risk, have been falling for the past five years,
Estep adds.
Innovations to consider
NACHA continues to offer new, innovative payment
opportunities. Estep notes three in particular that
should interest corporate treasurers:
4 International ACH. NACHA has been working
with the International Payments Framework
industry group, which includes banks and the
Federal Reserve, to enable U.S. companies to
make and receive overseas ACH payments. The
framework has developed a set of rules to create a
translation link between the U.S. ACH network and
similar non-urgent electronic payment systems in
other countries. Estep expects international ACH
transactions to utilize the framework to facilitate
the flow of transactions between the United States
and certain European countries by early 2010, with
links to the ACH systems of other non-European
countries to follow.
U.S. Bank is an original member of the
International Payments Framework. “I expect to
see an increase in international ACH payments in
2010, many of them using the standards
developed through this industry initiative,” says
Tim Schmidt, Vice President – Electronic
Payments at U.S. Bank.
® 2009 U.S. Bancorp
4 Secure Vault Payments (SVP). This NACHA
program allows organizations to provide an
online, ACH credit payment option for
transactions where use of a card isn’t possible.
SVP allows buyers to authorize payments using
online banking credentials while keeping their
account information secure. Colleges and
universities have been among the early adopters
offering this payment option.
4 Electronic Billing Information Delivery Service
(EBIDS). This program allows businesses to
deliver electronic bills to their customers’ online
banking accounts, receive authorized credit
payments through the ACH network, and use
ACH formats and rules to standardize electronic
bill presentment and payment (EBPP)
transactions among billing participants. Similar to
SVP, consumers control payment timing and don’t
have to divulge account information to billers.
“Both SVP and EBIDS will enable corporations to
receive payments from consumers in a secure and
efficient manner,” Schmidt says, “and at U.S. Bank
we’ve been looking at how we can integrate both
programs into our retail Internet bill pay site.”
To learn more about how you can continue to be a
payment innovator while effectively managing risk,
talk to your Treasury Management Consultant about
new ACH opportunities.
Fall 2009
The Power of Green
Skip the Yellow and White, Opt for Green
Over 500 million phone book directories are printed
every year. That is nearly two books for every
person in the country! These directories produce a
staggering amount of waste, not only in terms of
misused natural resources but also by filling
valuable landfill space.
To produce 500 million books:
4 19 million trees need to be harvested
4 1.6 billion pounds of paper are wasted
4 7.2 million barrels of oil are spent in
their processing
4 268,000 cubic yards of landfill are used
4 3.2 billion kilowatt hours of electricity
are squandered
The cost associated with the delivery and disposal
of these books is exorbitant. Unfortunately, these
unsolicited costs fall heavily on consumers. If you
would like to stop receiving phone books, visit the
Opt Out tab on yellowpagesgoesgreen.org to
discontinue delivery.
Yellowpagesgoesgreen.org will contact the local
telephone company and provide them with your
name and address. This does not cost you anything.
Please go to the sign-up sheet and help eliminate
this problem. If you wish to continue receiving a
phone book directory, be sure to recycle your
old ones.
Source: yellowpagesgoesgreen.org
® 2009 U.S. Bancorp